5 Financial mistakes to avoid while spending

Hello Storytime readers, it has been a while since I wrote a financial advice post. I do not know why I don't write these more often when I am an expert at surviving. I mean I survived Bouta, an economical crisis, a pandemic, and a pile of debt Suriname's politicians acquired without us actually noticing where those 4 billion dollars went. I am talking united stated dollars here, you think we'd have a train by now. It was supposed to be running since the 25th of May 2015, for a price of one Surinamese dollar you would be able to ride the train. Now we don't have a train, but we do have bad roads and expensive gas prices thanks to the devaluation of the Surinamese dollars.  And the ironic part is the country is rich in natural resources like oil, gold, diamonds, and other valuable minerals. But despite all of the challenges Suriname has faced it still has a lot of wonderful things to offer. When I first started this blog, one US dollar was worth 2,80 Surinamese dollars. Now one United States Dollar is worth 24,50 Surinamese dollars. As a millennial growing up during a country's financial crisis teaches you a thing or two. My survival skills have been put to the test and I had to learn the hard way. The good part is because of it I have discovered some awesome hidden skills that even I didn't know I had. Yes playing with your money can teach you a lot about yourself. Because your money influences your lifestyle and how you spend it says a lot about your lifestyle. It doesn't matter what country you are from, but I am sure you can relate to being a victim of bad leadership at one point in your life. This can even be true in working situations. The important thing is that we know it is important to be prepared through misfortunate events that we have no control over. There are certain actions and habits that we can adopt to secure the future. A secure future in a financial aspect must be the basis of 'quality of life. Quality of life should be a basic right for every human being. To ensure this financial future can be manifested here are 5 financial mistakes one should avoid while spending money:

               1. Not knowing where your cents are spent

This is a rookie mistake that I made for years. I regret not keeping track of my cents at an earlier age. The financial insight that you can gain from knowing where you spend your cents reflects your lifestyle and the lifestyle choices you make. For example, it is because I started to keep track of my cents that I knew that I spent way too much money on cookies and snacks. For me, it was a hint to adopt a healthier lifestyle and better eating habits. Especially if it turns out that 36 % of your income went to junk food at the end of the year. Yikes, that's just an example that I am giving. Everyone has their own vices and bad habits.  Keeping track of your finances makes you aware of how bad it is and if you can control it or not. It also helps you straighten out your priorities to meet your financial goals. If you want to buy something because it will be an asset, the less you spend on liabilities the faster you will get there. You can use applications that help you keep track of your money. These applications can be downloaded through the play store. Once you have such an app, you add your daily expenses to it. Most apps do an excellent job at giving you a proper overview of what percentage of your income goes to what. At the end of the year, you might be surprised by how quickly the numbers add up. If you have a clear overview of your money managing it becomes a lot easier. You might be surprised by the number of people who don't keep track of their expenses and are winging it blind. I am not judging, but unless you don't have an unlimited amount of money to spend it's better to play it on the safe side.

2. Not knowing the difference between a liability and an asset

When it comes to building some decent kind of financial knowledge you will find out why it is important to know the difference between a financial liability and an asset. A liability is something that will increase your expenses without you having any way of making money on it. Its presence causes a financial disadvantage to the owner. But an asset keeps holding its value. It can generate an income or help you generate income. Renting out real estate property for example is an asset. An example of a  liability is any acquired debt or expenses that one has to endure. Now that you are keeping track of your expenses and that you know where your money is going you can divide your costs into these two areas.  Write down what your liabilities and assets are. If you do not have any assets, the financial overview that you have gained from keeping track of your spending habits can help you generate more assets. Assets are necessary because they provide a value that can be transferred into cash.  The liabilities that you have can be divided into necessary liabilities and unnecessary liabilities. That is the way I mostly do it. Junk food is an unnecessary liability but clothing and a roof over your head are necessary liabilities. Terminate as many unnecessary liabilities as you can. That way you can save more money to invest in assets that will give you long-term profits.  The goal is to build multiple assets that can provide you with the lifestyle that you desire. And if you do happen to make a lot of money, make sure you put it to good use.

                              3. Splurging on impulsive deals

We all have those impulsive moments, but not being able to control impulsive buys can lead to unnecessary splurging. Especially if you aren't sitting on top of a mountain of money. If you have the kind of money where you don't care what you're going to spend in the next 50 years then all is well. But if you are still working towards achieving that financial dream it is better to avoid as many unnecessary impulsive buys as you can. I know it's alright to spoil yourself from time to time. But don't overdo it to an extent that your wallet will end up regretting it. For some people, it could be shoes, bags, food, clothes, or whatever rocks your boat. Too much, can be heavy on your pockets and set you back from achieving the goals that you have set for yourself. Marketing in stores and on social media is designed to trigger impulsive buying within the consumer. That's the point of sales. But don't get distracted by all the pretty things around you that you wish to buy. Ask yourself if it is really something that you need right now? If the answer is yes, go ahead and buy it. If the answer is no ask yourself how the money could be better spent? Take time to reflect on the purchase you want to make before you actually go through with buying it. Even I like spoiling myself, but they do say that there is a right time and a right place for everything for a reason. If you have nothing in your savings account to help you invest into assets that money saved can fit a better purpose. Once you have gathered enough assets that generate a satisfying income, you can loosen up on the shrewd spending habits. It is better to prepare for a rainy day since life consists of plenty of unexpected events. The goal is to become financially secure before you go crazy splurging. If you receive money today, it doesn't mean that you have to spend it all in one day.

                    4. Not taking the time to look for a better deal

I know they say time is money, but in this case sometimes not having enough time can cost you money. When you want to purchase an item, do a quick google search if you can find better deals. Or try to look at the prices of other stores. When you're in Suriname, you notice this when you go to supermarkets. Often times the same product has a different price in each supermarket or store. And the price difference isn't in pennies. Or else we wouldn't make a deal out of it. But in the culture of a business that happens. When you as the consumer wish to save more money, the best thing is to look around and see where you can get the better price. For example, I once bought a scented candle for 100 dollars, Surinamese dollars of course. A few minutes later I walked into another store, it turned out the same candles were there for 20 Surinamese Dollars. Lessons learned, of course depending on your lifestyle you have to weigh what has a priority. The money spent or the time? Everyone has a different answer to this. If you can make more money in the time that you spend looking around for a better deal, then I can understand what the obvious choice is. But if you do have the time to spare, and are living on a low budget you probably want to research prices first before making a purchase. It's a good technology that makes researching prices a lot easier.   

    5. Not knowing the value of the product you are purchasing

 

Knowing the value of the product that you are planning to purchase is important as well.  Before you decide to purchase an item, do some research on its value and how well the item retains its value. What value will it bring to your life? What is it worth? How much is it sold for? What percentage of the original price are second-handed ones sold for? These are all questions that you have to ask yourself before making a purchase. What the durability of the item is the knowledge that should be available to you as well. When you are satisfied with the answers that you have provided you can decide to purchase the item. Of course, if you can't afford it, or if buying it at that moment dries up your wallet doesn't make the purchase yet. Remember it's always good to have some funds for security. If you can't make the money that you spent back, think twice about it. And try not to get yourself in any unnecessary debt. Remember the main lesson here, it is better to be prepared. The pandemic has thought as that well. Especially how a lot of people their jobs were affected by the pandemic. A lot of people who had to stay home or even became jobbles because of the lockdowns didn't have the necessary funds to sustain life while the pandemic lasted. Of course, we hope that it turns out well for everyone struggling during this pandemic. Stay safe everyone and that was it for my golden advice in this edition of Storytime. Until the next time, be sure to subscribe.